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Monday, January 24, 2011

Posted by mikeparanzino
Jeffrey Immelt, CEO of GE, was responsible a number of years ago for one of the great quotations of recent decades, so I do not criticize him or GE lightly. He said: “More people will graduate in the United States in 2006 with sports-exercise degrees than electrical-engineering degrees. So, if we want to be the massage capital of the world, we’re well on our way.”

His willingness to take on the University Industrial Complex for the costly and useless degrees they hand out – while not sparing young Americans’ complacency as our nation’s leading position in the world erodes – was courageous and much-needed. Unfortunately, it was noted by Newsweak magazine and Fareed Zakaria, so no one has ever heard the line. [I'm breaking my only-link-to-Newsweak-for-Kaus-and-Will rule because the Immelt line is so good.]

But with President Barack Obama making Immelt the willing front man for Obama’s latest head-fake on jobs and the economy, and ultimately his re-election campaign, Immelt has cast GE into the spotlight and sorry, Mr. Immelt, the spotlight is incandescent, not compact fluorescent, so Americans will actually be able to see the truth about your company. It ain’t pretty.

Let’s start with jobs. The media, of course, took the bait surrounding Immelt’s new position at the helm of Obama’s “Council on Jobs and Competitiveness.” The Christian Science Monitor, to take one example, embraced the White House spin in its headline: “Obama launches new push for US jobs, tapping GE’s Immelt to help.”

But tapping GE’s top honcho to generate jobs for Americans is like the old saw about the guy who loses money on each item he sells but intends to make it up in sales volume. Newsflash for the Lamestream Media: GE has been shedding US jobs under CEO Immelt, while adding jobs overseas, notably in China.

In 2001, the year Immelt became CEO, GE had 158,000 US employees. In 2009, GE employed just 134,000 Americans. Under Obama’s guy Immelt, GE has shed 24,000 American workers, or 15% of its US workforce.

Abroad it’s a different story. In 2001, GE employed 152,000 workers abroad. In 2009, that number had edged up to 154,000. GE’s non-US workforce now exceeds its American workers. [I have heard that this trend continued in 2010 but could not find an authoritative figure by press time.]

Speaking at GE this past week, Obama said he intends, with Immelt’s help, to increase US exports. Let’s hope he was not talking about GE’s record exporting US jobs.

Where GE does clearly excel is getting the federal government to give taxpayer dollars to GE. The stimulus bill was loaded with programs for GE, and of course GE and GE Capital tapped tens of billions in bailout funds. And when they are not taking direct cash handouts from US taxpayers, GE lobbies for programs to make it billions more.

Obamacare includes mandates that are expected to make GE billions in electronic medical records and other areas. And GE even lobbied in support of the (sadly bipartisan) 2007 law that will ban the inexpensive, sometimes US-made, bright incandescent light bulb by 2014, in favor of mercury-containing, expensive, foreign-made, dim compact fluorescents. GE recently shut its last US-based light bulb factory, in Virginia, as Chinese plants churn out almost the entire supply of mercury-laced CFCs. (By the way, Speaker Boehner, it’s late January: why hasn’t the House yet passed a repeal of the “efficiency standards” that effectively ban incandescents? Call it the No Mercury for our Kids Act.)

So GE exports US jobs and aggressively sucks at the taxpayer teat. How’s it doing on our economic and national security? Not so good. GE recently inked a deal with a Chinese government-owned aviation company that will transfer advanced GE knowhow to the Chinese communist party and Chinese military – yes, the folks with nukes pointed at our cities. As the NY Times reports it:

G.E., in the partnership with a state-owned Chinese company, will be sharing its most sophisticated airplane electronics, including some of the same technology used in Boeing’s new state-of-the-art 787 Dreamliner.
… But doing business in China often requires Western multinationals like G.E. to share technology and trade secrets that might eventually enable Chinese companies to beat them at their own game — by making the same products cheaper, if not better.
The other risk is that Western technologies could help China play catch-up in military aviation — a concern underscored last week when the Chinese military demonstrated a prototype of its version of the Pentagon’s stealth fighter, even though the plane could be a decade away from production.
…
In fact, the corporate competition for contracts on the C919 became a “frenzy,” said Mark Howes, president of Honeywell Aerospace Asia Pacific. The Chinese government, he said, had made it clear to Western companies that they should be “willing to share technology and know-how.”
But the G.E. avionics joint venture, analysts say, appears to be the deepest relationship yet and involves sharing the most confidential technology. And G.E.’s partner, Avic, also supplies China’s military aircraft and weapons systems.

This is not just GE creating a future national security threat by handing advanced dual-use (civilian and military) technology to a dictatorship (Senator Reid was right on that one, bless his heart) with a soaring defense budget. GE is also eating its seed corn to goose profits today. As the Times put it:

The real concern lies further head, according to a study of China’s strategy included in a report published in November by a bipartisan Congressional advisory group, the United States-China Economic and Security Review Commission.
The group concluded that China’s huge state subsidies for its own industry, its requirements that foreign companies provide technology and know-how to gain access to the Chinese market, along with the close ties between its commercial and military aviation sectors all raise concerns and “bear watching.”
The big aviation equipment makers say that, by now, they are experienced at grappling with matters of technology transfer in China. In Cedar Rapids, Iowa, Kent L. Statler, an executive vice president for commercial aviation at Rockwell Collins, observes that his employees often ask whether the company is trading its future for immediate sales in China.

So GE is just a typical company putting short-term profits ahead of longer-term interests of itself or our country. That’s what companies do, right? That’s what GE does, except in one area. In its ownership of NBC and MSNBC, GE has consistently walked away from profits to maintain the liberal bias in its news division. In this one area alone, GE has left hundreds of millions of dollars in profits on the table over the years by keeping its news reporting slanted Left even as Americans grew more conservative and even after Fox News showed how a network devoid of liberal bias can dominate the ratings. Imagine if NBC News had ever eliminated its liberal bias. It would enjoy mammoth ratings (and bigger profits) today. But GE ignored those potential profits. Handing sensitive aviation technology to the Chinese communists for a quick buck? Sure. Eliminating liberal bias to increase profits? GE has always said no thanks. It took Comcast buying control of MSNBC just to get Keith Olbermann fired!

All of this is a reminder why it is folly to merge in one’s mind the interests of the American people with that of corporations, or labor unions, for that matter. Always look to the fiduciary duty to sort these issues out. A corporation’s duty is to its current shareholders, to maximize their profits. Their duty is NOT to America. A union’s duty is similarly to maximize its members’ wealth, NOT to help customers or make money for shareholders or to help America. It is the government’s role to protect America’s vital interests. Unfortunately, too many of our politicians believe their role is to protect favored corporations, or to protect the politicians’ own jobs. This is why our country is in so much trouble.

GE exports jobs, lobbies very well for direct taxpayer handouts and laws and regulations to further enrich itself at Americans’ expense, hands over its advanced technology to our adversaries for short term profits but to the nation’s and the company’s future peril, while protecting liberal media bias at all costs.

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